Last April, Sandra Wiekerson took a day off from her work caring for elderly people in their homes on Chicago’s northwest side. She joined 15,000 other Illinoisans in the state capital of Springfield for a historic rally and lobbying day.

“Raise my taxes,” they chanted. “Show some guts, stop the cuts.” Participants in the ‘Save Our State’ rally, one of the largest demonstrations ever directed at the Illinois legislature, urged the state government to raise taxes so it could pay for essential services, including $6 billion in unpaid bills carried over from the previous year.

The Responsible Budget Coalition (RBC) called the rally as part of a long, multifaceted campaign to fix fundamental flaws in the state’s tax structure that the recession worsened. The RBC is comprised of more than 300 groups, including social service agencies reimbursed by the state, public employee unions, and community, religious and citizen advocacy groups concerned about the welfare of vulnerable populations.

Wiekerson, 58, represents both dimensions: As a member of the Service Employees International Union (SEIU), she wants to preserve her own job. But she is also committed to her clients, who include an elderly man with heart problems and glaucoma, confined to a wheelchair with no family to help him.

“If the agency closes, who is going to take care of them?” she asks. “I see myself in these people, and I hope there will be somebody who will be around for me. We should ask the question, ‘Am I my brother’s keeper?’ “

Anatomy of a crisis

That question may not have been on Illinois state legislators’ minds during a January lame duck session. More likely, it was how the state could pay its bills. But by the narrowest of margins, Democratic lawmakers passed a substantial increase in state income taxes–67 percent higher for individuals and 46 percent higher for corporations (that is, for the less than one-third of Illinois corporations who pay any income tax). The newly re-elected Democratic Gov. Pat Quinn swiftly signed the bill into law.

The Illinois tax package is among the largest of the revenue increases that have been enacted since the financial crisis began. According to the Center on Budget and Policy Priorities (CBPP), 30 states have already taken such measures, including 12 that have raised income taxes. During the past two years, 46 states including Illinois have also reduced public services.

The tax hike only did “the bare minimum they had to do,” certainly not all that the coalition wanted, says Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, a member of RBC. The increase is temporary. It provides no relief for lower-income taxpayers from the constitutionally mandated flat tax. It imposes a spending cap. And until the legislature approves new bonding authority, it does not permit the state to promptly pay its old bills.

Without new revenue, Illinois faced a $15 billion budget deficit. Even before the recession deepened its fiscal crisis, the state suffered from a severe structural deficit, which grew out of a tax regime that disproportionately burdens lower-income people and does not generate enough revenue to meet growing state needs.

Illinois does not face deficits because it is poor (it ranks fourteenth among states in per capita output in 2009) or because it is profligate. It spends far below average in proportion to its wealth and capacity; in 2008 it ranked forty-fourth in total state and local taxes as a percentage of income.

The problem is that during the past two decades, Illinois leaders have been spineless and irresponsible. Republican Gov. Jim Edgar embraced progressive tax reform after being elected in 1994, but his own party rebuffed his plan. Then, in 2002, Democrat Rod Blagojevich was elected governor, promising “no new taxes” at a time when his party could have easily raised and reformed taxes in Illinois.

Opportunism knocks

It’s a familiar story playing out (in less severe fashion) across the country, as states governments currently face their “most difficult year on record,” CBPP reports. These state budget crises have ominously drawn a response by a new conservative crop of Republican governors and legislators (see Frontline story, page 11), joined by some Democrats like New York Gov. Andrew Cuomo, to promote deep budget, service and job cuts that will surely hinder the recovery. At the federal level, Newt Gingrich and other right-wingers propose granting states the right to declare bankruptcy as a tool to escape pension obligations.

In a broadside attack on unions and worker rights, politicians are exploiting the current crisis to promote restrictions on collective action by both public- and private-sector workers. Proposed restrictions include new right-to-work laws; elimination of public workers’ rights to unionize or strike; rollback of state minimum wages; and prohibiting union recognition through majority sign-up.

Unions are resisting these assaults with public education campaigns that rebut the misconception that public workers are overpaid and have unaffordable pensions, and that shift blame for the crisis from workers back to Wall Street. Paul Booth, assistant to the president at AFSCME (American Federation of State, County and Municipal Workers), says that his union is also “appealing to rank and file members of organized labor to take matters in their own hands.”

Unions and progressive allies in many states are taking matters in hand by preparing their own set of initiatives. These include granting workers paid sick days and family leave, raising the minimum wage, enforcing laws against “wage theft” and progressively raising taxes. For example, Citizen Action New York is proposing measures to create jobs and improve schools with revenue from higher taxes on millionaires.

The RBC’s victory “gives people a sense that it could happen elsewhere and provides a model for organizing,” says Jeff Blum, executive director of USAction, a national coalition of groups like Citizen Action/Illinois, which helped to raise Illinois’ income taxes. “We can’t just be defensive.”

Building and executing the campaign

It’s obvious that progressives should take the offensive and promote fairer taxation and closing corporate tax loopholes. So how did they do it in Illinois, with substantial (albeit imperfect) results?

Over the years, various budget coalitions have formed to promote higher, more progressive income taxes and sales taxes on services, most recently with a promise of more school aid and property tax relief. But the business people and hedge fund investors who in 2007 had been part of that effort–dubbed A+ Illinois–dropped their support for tax hikes to better fund public schools. Instead, by late 2008, most began promoting charter schools.

Citizen Action, AFSCME and other groups began re-forming a coalition in early 2009, soon joined by another coalition started by SEIU. By the summer of that year, John Bouman, director of the Sargent Shriver National Center on Poverty Law, had assembled a broad coalition by overcoming past tensions among different constituencies, such as social service and education advocates, provider agencies or firms and unions, low-income groups focused on progressive taxes and organizations focused on raising revenue. The RBC was born.

RBC initially united on four principles: no major service cuts, significant new revenue, more tax fairness, payment of back bills and later, no built-in spending constraints. But House Speaker Michael Madigan–a powerful but conservative and cynical Democratic leader–wanted a bill that would draw some Republican votes, giving House Democrats bipartisan cover in the next election.

Nevertheless, RBC pressure solidified Democratic lawmakers’ support for a tax hike. And the work of many coalition members enabled Quinn, who supported an increase, to narrowly win re-election, even if some endorsed him reluctantly following his cuts to services and to new workers’ pensions. In negotiations Madigan prevailed, but the concessions he forced won no GOP votes.

“Madigan thinks the state spends too much, and he doesn’t much care about improving education or human services,” says AFSCME community and political affairs director John Cameron. “So forcing him to pass any tax increase is a victory for the progressive movement. But it is what it is.”

That is to say, it’s a real, if limited, achievement showing what savvy, inclusive organizing can do in these hard times.

David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at davidmoberg@inthesetimes.com.

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cdyghkjlfuylkPosted by ofice2010 on 2011-04-26 20:28:52

Some old fashioned common sense us needed to deal with the growing divide between what exec’s make and what the workers make.Posted by airmax on 2011-03-08 01:12:12

This is austerity for those of us who are fortunate enough to be employed! Their tax increase now makes it impossible for me to pay my bills so I am voting with my feet. GOOD BYE ILLINOIS! I was born and raised in Chicago but I am leaving as I can no longer AFFORD to live here!
THEY INSTITUTED AUSTERITY ON THOSE OF US WHO WORK FOR A LIVING!Posted by Adocann on 2011-02-19 07:02:58

Alan O. Yes TX is doing fair on jobs but see this http://www.dallasnews.com/business/headlines/20101217-texas_unemployment-rate-rises-despite-gain-in-jobs.ece
And don't forget, those out of work for more than 6 months are no longer counted.
The idea of CEO pay is a hard one to debate, in a sense. A private company, started by the owner and nurtured into a viable business ought to pay whatever it wants to the owner.
A public company, where the CEO is more figurehead than actually anything else is quite another thing. Pay could easily be held to a percentage of the company's profitability.
Paying someone 2.39 million (an 8% raise over 2010) with a 3.36 million dollar bonus (an increase of 40% over previous bonus) seems a tad over the top. What does he do that other CEO's can't do? Did the people who actually do the work that earns the revenue get an 8% raise? Kinda doubt it.
We have seen that most bigger companies, left to their own, will do anything, legality and morals aside, to make more money. All the while demanding less taxes and more freedom to do as they please.
Some old fashioned common sense us needed to deal with the growing divide between what exec's make and what the workers make.
Take a look at http://sociology.ucsc.edu/whorulesamerica/power/wealth.html for an idea of the divide.
I really can't see that being good for the Country as a whole. Can you?Posted by farmer on 2011-02-18 09:27:23

Re: Farmer. I would say Texas is doing more than a "tad" better than the rest of the country. I read an article a couple of weeks ago claiming that almost half of the new jobs created since 2009 have been in Texas.
"Just be reassured that the honcho at Exxon Mobil draws one Hell of an obscene pay check with benefits and perq’s on top of that." Fair enough. But what's your point? Would you have the government decide how much he should get paid? If so, what standard should they use for deciding how much? And if the government is going to decide how much the CEO of Exxon gets paid, then would you have them decide how much everyone gets paid? That's called socialism - which is the idea that government committees are better at deciding what prices and wages should be than the free market. It has been tried countless times in human history because it sounds so appealing (esp. to the ignorant), but it always ends in disaster.
Also, people who gripe about CEO pay are always vague about the numbers. Consider for example that last year the CEO of Wal-Mart Stores Inc. (the world's largest corporation by revenue and by number of employees) made about $20 million. If you divided Wal-Mart's CEO's pay (20 mill) among Wal-Mart's 2.1 million employees, that works out to less than $10 per employee per year. So, yeah, clearly the idea that we could just cut CEO pay and the rest of us woul be rich is patently absurd. Anyone who gripes about CEO pay is just peddling cheap, gutter-level left-wing propaganda.Posted by Alan O. on 2011-02-18 08:13:22

Yes, they vote with their feet, and come to TX (among others) just as the rust belt crowd arrived here in the '70's. Up until then TX had been a Democrat State. Schools turned out students that didn't need remedial training when they entered college. We had a highway system that was the envy of many States, only CA and CO possibly having better roads.
Plus, we had a good business climate. Had our fair share of big businesses, Mobil, Humble Oil, Texaco, insurance companies and banking.
Then the R's started taking over. Suddenly, money got real tight, due to tax breaks given to businesses. Those same businesses had been doing just fine, making money and some modest growth. I guess the rationale was, if they paid less tax, they'd do better.
But spending never slowed down. And look at us now. A tad better than the rest of the Country. And facing a Hell of a shortfall. A shortfall that our alleged gov says, don't worry, I'll deal with it. You don't really need to worry ... unless you hear him tell you not to worry. Just be reassured that the honcho at Exxon Mobil draws one Hell of an obscene pay check with benefits and perq's on top of that.
So come on down. Hardly anybody is hiring, aside from manual labor, but that will change ... someday. We hope.Posted by farmer on 2011-02-17 23:47:37

As a conservative I would have thought I would be horrified by this article and what is going on in IL. However, I'm not! The reason? I think in a Democracy we have to respect the will of the majority of the voters. In IL the majority of the voters reelected a democratic Governor and legislature. In other words they voted for more taxes because that's what democrats do. They raise taxes on working people and business so they can distribute the money to public employee unions, the poor, and those that simply don't work so that they will vote them into office. The problem is that IL hasn't raised taxes enough! The state still has a terrible deficit and no extra money to spend to give raises to public emloyee unions. No extra money to give to left wing special interests. The answer is simple? Take the tax increase they just did and double it....or maybe triple it. Increase taxes enough to wipe out the deficit and give those hard working public employee union members a nice big raise...say 15%, and the poor and the handicapped need more help, and there are homeless people. Yes that 67% tax increase has to become at least a 200% tax increase, and why should business pay less. Make their increaes 250%. Then everybody with their hand out can be happy, the majority of the voters who voted for the Democrats will be happy, and the state can have a big party. Now if you didn't vote for the Democrats and you think you pay enough taxes then you have an option. Get out! There are states where people who work for a living are respected and aren't looked upon as sheep to be sheared! Move to one! Otherwise enjoy the taxes. Good luck to the good people of the state of IL!!!!!Posted by valwayne on 2011-02-17 20:45:17

I went to Arlington Illinois last year and the motel tax and sales tax was so high I vowed not to go back I don't know about their income tax but the rest of the taxes was enough that I wont go backPosted by Walter Bindner on 2011-02-17 16:00:29

"A 300-member coalition helps raise taxes to save essential services."
Thereby driving more productive people out of the state. And the only thing "essential" about those "services" is that they're necessary to keep the paycheques coming for the AFSCME and SEIU parasites.
What are the unions going to do when the last real taxpayer leaves the state?Posted by HenryMiller on 2011-02-17 14:58:10

The results will speak for themselves. For decades businesses and the middle class have been fleeing the upper midwest (esp. the Chicago area), the Northeast, and California for the South and the Mountain states. In other words, businesses and workers are voting with their feet, leaving the bluest states and heading toward the red states, where they find lower taxes, less regulations, less unions, less "social services", more jobs, better schools, lower crime, etc. Even right here in my neck of the woods - the mid-Atlantic - Northern Virginia continues to boom with thousands of people moving in every month from over-taxed over-regulate Maryland. As the white middle class continues to flee the blue states, the blue states will get even bluer (since most of the well-educated people who are leaving lean GOP), and will the fiscal and economic insanity in the blue states will only get worse. Pretty soon most of Illinois, New York, and California will be as empty and as desolate as Detroit. Good job, guys!Posted by Alan O. on 2011-02-17 14:11:45